Metals firm after Fed outcome, several at multi-week highs

Base metals continued to push higher in LME pre-market sessions on Thursday, with the hesitation of Wednesday replaced by more positive short-term sentiment.

Copper, aluminium and nickel all climbed to multi-week highs, traders said. The moves in the metals matched trends in wider markets, where other commodities and equities were rising in the wake of the US leaving monetary policy unchanged at its latest meeting.

Although this came as no surprise, prospects of tightening taking place at the next meeting are hardening.

“[Prices are not racing away but the markets are ‘better bid’ on the headlines and there is a little bit more on the upside as one would expect the physical side to get in to gear for the last quarter,” a trader said.

In the metals, copper moved above the $4,800 level to set a one-month high, aluminium cleared $1,600 to touch its best for three weeks and nickel rose solidly to a six-week peak.

“Prices are all firmer this morning and are gaining across the board. They are presumably finding support from the weaker dollar after the Federal Reserve did not raise interest rates any further yesterday,” broker Commerzbank said in a report.

The dollar was softer around 1.1240 against the euro. In other markets, gold built on the previous day’s upmove and was a steady $1,332.65/1,332.95 per ounce. In equities, th UK FTSE 100 rose some 0.5 percent, with mining stocks leading the way.

At the conclusion of its September meeting on Wednesday, the US Federal Open Committee (FOMC) kept the Federal Funds rate unchanged at 0.25-0.5 percent as widely expected but laid down the groundwork for an increase in the coming months. The FOMC vote for September was spilt – three FOMC members dissented, preferring to raise rates now. This is an unusually large number.

The pace of economic data inputs picks up today. There is a UK financial policy committee statement, data on UK industrial order expectations and EU consumer confidence figures this morning. Later, US initial jobless claims, the US house prices index, exisiting home sales and leading indicators are scheduled. There are also numerous central bank speeches, including from ECB president Mario Draghi and Bank of England governor Mark Carney.

In the metals, copper rose to $4,817.50 before settling at $4,816 per tonne, a $53 advance from the previous close. Warehouse stocks declined a net 1,750 tonnes to 346,050 tonnes.

Aluminium was at $1,606, up $22, while inventories declined 8,150 tonnes to 2,153,425 tonnes, the lowest since December 2008.

Nickel, supported by fundamentals, continued to make inroads above $10,000, trading at $10,505, a $180 advance. Inventories climbed 120 tonnes but this was from the lowest since October 2014 – they stand at 364,902 tonnes.

In others, zinc gained $12 at $2,284, seeing some resistance at $2,300. Stocks fell 300 tonnes to 443,850 tonnes. Lead traded at $1,945, up $11 – stocks fell 200 tonnes from what had been the highest since March to 191,025 tonnes.

Tin business at $19,455 was up $155, while inventories were unchanged at 3,475 tonnes. Steel billet, cobalt and molybdenum were all neglected.

(Additional reporting by Vivian Teo in Singapore, editing by Mark Shaw)